Coffee rises as short-term bottom may be forming

COFFEE (NYBOT:KCZ13)

General Comments: Futures were higher in early trading, and put in their best close in New York for the month. Speculators appeared to be covering short positions in active trading. Industry and producers appeared to be quiet. Some buyers have told us that they have bought enough for the year, while some small shops still need some fill in lots. The move higher could imply that a short term bottom is forming, but more buying and higher prices will be needed over the next few days to confirm any trend change, even just for the short term. Traders think that there is still a lot of coffee to sell in Brazil and in northern South America and also know that a big crop is coming from Vietnam. All these countries and regions have been offering with low differentials. Vietnam is at harvest. So far, offers from Vietnam have been light. Brazil has a lot of Coffee to sell yet, but the market there is quiet. The rest of northern Latin America was quiet.

Overnight News: Certified stocks are a little higher today and are about 2.704 million bags. The ICO composite price is now 100.95 ct/lb. Brazil should be mostly dry, but will get showers on Sunday. Temperatures will average near to above normal. Colombia should get scattered showers, and Central America and Mexico should get light showers. Temperatures should average near to above normal.

Chart Trends: Trends in New York are mixed. Support is at 102.00, 99.00, and 96.00 December, and resistance is at 107.00, 108.00, and 110.00 December. Trends in London are mixed. Support is at 1460, 1430, and 1400 January, and resistance is at 1520, 1575, and 1605 January. Trends in Sao Paulo are mixed. Support is at 130.00, 128.00, and 125.00 December, and resistance is at 135.00, 138.00, and 141.00 December.

COTTON (NYBOT:CTZ13)

General Comments: Futures closed mixed in consolidation trading. There was no real news to push markets, but nearby December was supported as short speculators began to cover or roll out of positions. Good weather in US productions areas should be replaced by scattered showers over the middle of the week in the Southeast, but the crop should remain in good condition as the rains are not expected to be big. It will turn colder later this week. Traders should get more reports on demand this week, and will get crop conditions released today as the US government was closed yesterday.. Brazil conditions are reported to be very good in Bahia. US crop conditions right now are generally good in Texas. The Delta and Southeast are reporting generally favorable conditions as well.

Overnight News: The Delta and Southeast will see dry weather this week and light precipitation this weekend. Temperatures will average below normal this week, but near to above normal this weekend. Texas will see dry weather this week and light precipitation this weekend. Temperatures will average below normal, but will trend to near to above normal this weekend. The USDA spot price is 75.34 ct/lb. today. ICE said that certified Cotton stocks are now 0.181 million bales, from 0.176 million yesterday.

Chart Trends: Trends in Cotton are mixed. Support is at 77.60, 75.90, and 75.30 December, with resistance of 78.80, 79.800, and 80.00 December.

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